NC Democrats want a summer gas tax break. Republicans are looking longer-range.
North Carolina Democrats are making their pitch to the Republican-controlled state legislature to offer a summer tax break.
Senate Democrats want to use 20% of the $6.5 billion budget surplus to give North Carolinians age 18 and older who are licensed drivers a $200 tax rebate.
Republicans in both the Senate and House have told reporters that they would prefer longer-range tax cuts, like speeding up those passed in the 2021 budget, to spending one-time money.
Democrats are more focused on immediate relief. According to AAA, the average price of gasoline in North Carolina as of June 2 is $4.39 per gallon, which is lower than the national average of $4.71.
“We want to put more money in their pockets now,” Senate Democratic Leader Dan Blue, of Wake County, told reporters on Thursday. Blue said Democrats have also proposed restoring the previous sales tax holiday that was held for school supplies shopping.
Senate leader Phil Berger said Thursday that’s he’s open to hearing suggestions of a rebate, but not necessarily what Democrats have proposed. Berger suggested Democrats in North Carolina look to their Democratic colleagues in Washington, including President Joe Biden, for the solution to high gas prices by increasing the supply of oil to reduce costs over time.
Berger said because the revenue surplus is projected to be recurring, he wants tax cuts to be as well.
Gas taxes or income taxes?
Sen. Michael Garrett, a Guilford County Democrat, said passing the rebate bill would “provide much-needed relief right now.”
“The state is sitting on a $6.5 billion surplus and we need to put back in pockets of working families as soon as possible,” he said. Garrett also said Democrats want a rebate so the money goes to North Carolinians, not drivers passing through the state.
Berger, however, said Senate Republicans are “not inclined to move in that particular direction.”
“I think we are interested in some form of tax relief, possibly even some form of rebate. But I just don’t know that that is the method we would use. We’re open to suggestions.”
Berger, an Eden Republican, said he’d rather accelerate the reduction in personal income tax.
The Democrat-sponsored bill, Senate Bill 897, would give $200 checks by Oct. 1 “to assist families to pay for the high costs of gas and increased food prices associated with the increased fuel costs.” The money would only go to licensed drivers at least 18 years old, though Blue said they’d support giving it to younger drivers as well.
House Speaker Tim Moore, a Kings Mountain Republican, was even more dismissive of the gas tax rebate idea.
“I mean, we’ll look at everything,” Moore said, then blamed Biden’s energy policy for gas prices.
Earlier in the session, Moore told reporters that he didn’t want a potential rebate to look “like a gimmick” and wanted something that “pays dividends down the road,” meaning permanent tax reductions.
House Democratic Leader Robert Reives, of Chatham County, said Thursday that tax cuts should benefit working families.
“What are we doing to alleviate the pain that working families are in?” Reives asked.
Republicans in both chambers have consistently mentioned supporting faster reduction of the personal income tax rate, which was reduced this year to 4.99% with plans for future reductions.
Sen. Paul Newton, a Cabarrus County Republican who chairs the Senate Finance Committee, said last week that while he wants tax relief, it was still “too early to tell if there could be any sort of rebate.”
Budget negotiations
The House and Senate have already agreed on a total spending number of $29.5 billion to $30 billion in the budget, The News & Observer previously reported. Republican budget writers are still discussing the amount of raises that may be included for state employees and teachers.
The General Assembly isn’t required to pass a smaller budget bill on the off years of the two-year budget process, but it usually does with minor adjustments. Berger reiterated to reporters on Thursday that the short session could end without a new budget bill, leaving the 2021-23 spending plan in place.
“The state will be just fine on the budget we adopted eight months ago,” he said.
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.
This story was originally published June 2, 2022 at 4:38 PM.
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